You can learn more about a firm's real strategy in a morning by watching how a decision moves through it than you can in a day reading its strategy document. The document is a statement of intent. The operating model is a statement of what the firm is actually able to do.
We see this whenever a strategy document describes an ambition that the firm's operating model has no way to deliver. The ambition is genuine, the document is well written, and the work never lands. Not because the strategy was wrong, but because the operating model was not reshaped to match it.
Three places the operating model tells the truth
- Where budget decisions are actually made. Not where the governance slide says they are made, but where the money actually moves. The authority that moves the money is the authority that controls the strategy.
- How long a medium sized decision takes to go from proposal to action. A firm whose decisions take eight weeks to move has a different strategy, in practice, from a firm whose decisions move in eight days, regardless of what their strategy documents say.
- What the best people are rewarded for doing. Strategy is whatever the top performers believe will get them promoted. If that is not the same as the strategy on paper, the paper version is aspirational.
What we look for first
When we are asked to help a leadership team with strategy, we usually spend the first week with the operating model, not with the strategy document. We sit in on budget discussions. We ask how decisions of different sizes have moved in the past year. We look at who has been promoted and why. The picture that emerges almost always tells us which parts of the stated strategy are real and which are wishful.
The shape of decisions inside a firm is the honest version of its strategy. The document is the diplomatic version.
The implication for strategy work
The implication is that strategy work which stops at the document is unfinished. Any strategy that requires the operating model to change has to include, from the outset, a specific plan for that change. Otherwise the strategy will be adopted rhetorically and ignored operationally, and leadership will wonder why the results never arrived.
We have rarely seen a strategy engagement go well where the operating model conversation was left for the implementation phase. By then the political energy has moved on, and the people with the power to reshape the operating model have already turned to something else.